ACCT ch1. Interactive presentation

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Terms in this set (...)

LO1: Financial accounting primarily deals with the methods accountants use to provide information to an organizations internal users. True or False

false

LO1: which of the following questions is most likely to be asked by a creditor?

Will the company be capable of repaying its debt when it is due?

LO1: Which of the following questions is most likely to be asked by an investor?

Will the company stock increase in value?

LO2: Ron owns five percent of a corporations common stock. The concept of limited liability would imply that Ron is personally responsible for only fiver percent of the financial obligations of the corporation.

false

LO2: Which of the following is. feature of the corporate form of business ownership?

Double taxation

LO2: Which of the following is an alternate form of the accounting equation?

Assets-liabilities=stockholders equity

LO2: The value of a company to its owners equals total resources of the company. TRUE or FALSE

false

LO2: amounts owed to a supplier of dress material

liabilities

LO2: salaries paid to employees

expenses

LO2: share of profits paid to owners of a company

dividends

LO2: consulting fees earned by a firm

revenues

LO2: trucks owned by a transportation company

assets

LO3: Which of the following demonstrates that the company resources equal creditors claims plus owners climbs to those resources?

The balance sheet

LO3: the balance of retained earnings represents the account of earnings paid out in the form of divides to stockholders. TRUE or FALSE

false

LO3: the cash received from customers is reported s part of the ending cash balance in the valance sheet and as part of operating cash flows in the statement of cash flow. TRUE or FALSE

true

LO3: You are reading. Particular section f a banks annual report. This section provides the banks views about the impact of a upcoming regulation on the banking industry as a whole and the bank in particular. Which section of the annual report are you reading?

Management discussion and analysis

LO3: this statement tells you if a company is profitable.

the income statement

LO3: this statement has two components: common stock and retained earnings.

the statement of stockholders equity

LO3: this statement shows the net change in cash over the period

the statement of cash flows

LO3: this statement reports the financial position of a company at a point in time

the balance sheet

LO4: which of the following best explains a company's stock price performance?-dividends-net income-accounts receivable-preferred stock

net income

LO4: which of the following is an important indicator of a company management's ability to respond to business situations and the possibility of bankruptcy?-inventory-accumulated depreciation-total stockholders equity-total liabilities

total liabilities

LO4: if you are able to predict the change in financial accounting's measure of profitability, you can predict the change in stock prices, too. TRUE or FALSE

true

LO4: investors and creditors rely heavily on managerial accounting information in making investment and lending decisions.TRUE or FALSE

false

LO5: FASB

body responsible for establishing financial accounting and reporting standards in the United States

LO5: SEC

Agency with both the power and the responsibility for setting accounting and reporting standards for publicly traded companies in the U.S.

LO5: IASB

Standard-setting body responsible for convergence of accounting standards across countries.

LO5: what was the objective of the 1933 Securities Act?-it set forth accounting and disclosure requirements for initial offerings of securities.-it provided for the regulation of auditors and the types of services they furnish to clients-it paved the way for the creation of the Public Company Accounting Oversight Board- it created a government agency, the Securities and Exchange Commission (SEC)

it set forth accounting and disclosure requirements for initial offerings of securities

LO5: which government agency has the authority to set accounting and reporting standards in the United States?-International Accounting Standards Board-Securities and Exchange Commission-Public Company Accounting Oversight Board-Financial Accounting Standards Board

securities and exchange commission

LO5: all companies in the United States must follow Generally Accepted Accounting Principles and must publish financial statements in accordance with those rules.TRUE or FALSE

false

LO5: if mistakes or fraudulent reporting behavior are discovered, auditors require the company to correct all significant information before issuing financial statements. TRUE or FALSE

true

LO6: which of the following is true of public accounting?-a career in public accounting means providing accounting services to the company that employs you-a public accountant usually gets to work with multiple clients-public accountants almost always earn higher starting salaries-one who takes up a public accounting career will invariable work for the government

a public accountant usually gets to work with multiple clients

LO6: from the list that follows, identify a company wehre a private accountant could possible work.-target-ernst & young-KPMG-deloitte

target

LO6: with a finance degree, you can apply for almost any position available to accounting majorsTRUE or FALSE